By Randy Cope
In the 1970s my folks had four children still at home, so when they decided to build a new house they purchased six spacious acres and designed a house with plenty of rooms for the whole family.
A few years ago, however, they realized that all of that house and all of those acres were way more than they needed or wanted to care for so they decided to downsize to a smaller home that better met their needs.
For many small daily newspapers it is time to consider the same “downsize” option by moving to fewer days or even to weekly frequency. Once revenues get down in the million-dollars-a-year range, it can be very difficult to produce a quality daily newspaper in a profitable way.
The good news is that a once, twice, or three times weekly can be a great thing for a community. In fact, some of the best newspapers I see are weekly newspapers.
The key problem with many small daily newspapers is that they wind up with five or six weak newspapers each week, often filled with canned copy because the small staff just doesn’t have time to produce enough quality stories for each day.
In order to pay for this daily cycle, you still have to charge a fairly high subscription price, and readers just don’t see the value in these weak editions so circulation starts dropping off.
Some smaller communities are much better off served by a quality weekly or bi-weekly. The news staff can focus on producing one or two quality newspapers a week and subscription rates can come down to a price point that more families can afford.
Having said this, it is still a difficult transition for many communities to accept. If not handled properly, the community could feel that the newspaper is taking something away from them.
Making this transition in a healthy way requires a number of steps:
1. Doing it for the right reason
The most important step is to make sure the owners are reducing frequency for the right reason – that is to make a newspaper that is better for all parties – the reader, the advertiser, the employees and the owners. No product can thrive unless all parties are considered.
For the reader, the goal is to produce a product that they get excited about. Rather than five or six anemic products, you are now going to give them one or two healthy products filled with interesting stories and photos. The readers should also be assured they have access to breaking news and information like obituaries every day through the newspaper’s website and email blasts.
For the advertiser, the message is that their advertisements will be much more effective because more focus by the community is given to these one or two issues a week.
For the employees, it is a win because they are not spending all of their time cranking out editions and instead can concentrate on producing quality stories.
And for the owners, they have a product that not only produces a better bottom line, but also is also sustainable into the future.
2. Plan for success
For you to have a successful transition it is good to retool the operation for this new product.
Start by building a new budget that has the targeted EBITDA (profit) percentage. It is important to start with a solid revenue projection. It is possible that circulation revenue will drop off a bit initially, although over time this can be made up by bringing new subscribers on, due to the lower price and the improved product.
We find that most healthy newspaper companies can provide EBITDA in the 15-20% of revenues range. If you decide to go with 15%, that leaves 85% for the expense side of the budget. We recommend using industry benchmarking to decide how to break this 85% down by department.
Keith Blevins, former COO of CNHI said, “The first step in a successful transition is to develop a comprehensive plan.” According to Blevins this plan should be a detailed list of every step of the conversion. It is important to list the person responsible for each step, along with a date that step should be accomplished.
- Consider redesigning the product, giving it a new look and feel.
- If you own a press, this might be the time to consider shutting it down and outsourcing. This might also lead to selling the building and moving into a smaller, more efficient building.
- If you are carrier delivered it might be more efficient to convert to postal delivery, at least in the rural areas.
- You should plan for the conversion timeline. Besides planning your communications plans, you might also want to start shifting your coverage focus to the new day(s) so that those products become the ones readers most look forward to, even before the conversion.
3. Communicate your message
I have personally been involved with a couple of conversions and the one that was most successful was when I had a good publisher who was well connected in the community. He spent a lot of time leading up to the conversion date going out and talking to community leaders to convince them that the conversion was going to be good for the community.
It is also very important to think of those customers who will be impacted by the shift, and work with them on ways to lessen the impact. Two that are most impacted are attorneys (who have to come up with a new plan for scheduling their legals) and funeral directors for the obits. Also make sure you communicate the change with pre-print advertisers well in advance as well as both local and national clients.
When reducing frequency you may want to increase your single copy price. Diana Brockman, business manager with the Carthage (MO) Press says, “change your dealer prices with Nexxus early – Wal-Mart needs a 90-day notice.”
You should also plan your communication with readers through a series of stories, editorials and house ads leading up to the conversion date. The key is to let them know that you are committed to serving the community and feel that this change will help you do that better. “Be honest with the community, let them know what you’re doing and why you’re doing it,” Blevins added.
It is also good to point out that you are committed to serving them every day through the website and will let them know of breaking news through email blasts. You should send out a letter to all subscribers addressing the positive reasons for the change and to let them know of the new, lower subscription rate, assuring them any money they have paid will be prorated for the new frequency.
4. Deliver in a big way
Finally, all of the positive communication you do will be wasted if you don’t truly deliver a better product after the conversion. Scott Champion, president of MCM, LLC, encourages others to, “bump the page count on the new product, filling it with local content.” Use outside writers and photographers, if necessary, so that the coverage in the new product is noticeably better than before.
Champion also likes the idea of having one paid product and one free product that has expanded distribution, “you have to have the penetration the advertisers need,” he says.
Unfortunately, we are seeing some small daily newspapers cease publication because their community stopped supporting them. As revenues dropped off they kept producing daily editions, but cut back on news hole and staffing, trying to continue producing a small profit. Unfortunately this created a downward spiral as the poor product caused readers to decide not to renew their subscriptions, leading to less revenue.
The better option in many cases is to make the conversion to weekly or bi-weekly and start moving things in a positive direction for the future.
Cribb, Greene & Cope is committed to helping the newspaper industry thrive in the future and would be glad to discuss this directly if you are considering a move from daily to weekly or bi-weekly.
Randy Cope is a director and partner with Cribb, Greene & Cope and can be reached at email@example.com.